Fashion Execs Brace for Bad Times Ahead
Many executives in the fashion industry are worried about an impending recession, and one of the main concerns is cutting back on marketing and technology budgets. At a recent event I attended in New York, there was much discussion about how bad t[...]
There is a disconnect between how retail executives and consumers view inflation and the potential for a recession. While three out of four retail executives believe a recession has already begun, consumers are not as convinced. This discrepancy could have major implications for the economy moving forward.
Given the current economic conditions, it may seem logical to stockpile cash in case of an expected downturn. However, history suggests that this may not be the best strategy.
I couldn't agree more with Warren Buffett and Henry Ford on the importance of advertising, even during tough economic times. I believe that advertising is an essential part of any business, and that cutting back on advertising is a false economy. Advertising is an investment that will pay off in the long run, by helping to build brand awareness and customer loyalty. In the short term, it can also help to boost sales and generate income. So, even during tough times, businesses should continue to invest in advertising.
At a time when many companies are feeling the pinch financially, Bob Liodice of the Association of National Advertisers is urging them to think twice before cutting their advertising budgets. In a recent article in The Wall Street Journal, Liodice warned that brands who do so may find themselves at a competitive disadvantage. Liodice's advice is based on the premise that even in tough economic times, consumers still need and want products and services. Therefore, companies that continue to advertise and market themselves effectively will be in a better position to weather the storm and emerge stronger on the other side. For companies considering cutting their ad spend, Liodice's message is clear: think twice before doing so. In the long run, it could end up costing you more than it saves.
The study by Frankenberger and Graham is proof that companies should increase their advertising spending during recessions. The data shows that companies who increased their advertising during recessions performed better than those who cut their advertising. This is because advertising helps to keep businesses top of mind with consumers, who are looking to save money during tough economic times.
It is clear that advertising is a powerful tool for companies, both during recessions and in good economic times. By increasing their advertising budget during a downturn, companies can improve their financial performance and share price for up to three years after the recession ends. This is a valuable strategy for any company looking to weather the storm of a recession and come out stronger on the other side.
There have been numerous studies conducted on recessions throughout history, and many of them have found similar results. One of the most famous examples is the battle between the two leading breakfast cereal brands of the day, Kellogg and Post, which took place during the economic crisis of the late 1920s. This battle was detailed in The New Yorker in 2009, and it provides insight into how companies can survive and even thrive during tough economic times.
Kellogg's success during the Depression shows that aggressive marketing can be a winning strategy, even in tough times. The company's investment in radio advertising and new cereals paid off, boosting profits by nearly 30%. Today, Kellogg is the clear leader in the breakfast cereal category, thanks in part to its willingness to take risks and innovate.
Walmart is a great example of a company that has been able to weather the storms of the economy. Founder Sam Walton is famously quoted as saying, "I thought about it and decided not to participate." This shows that Walmart is a company that is able to stick to its guns and continue to be successful, no matter what the economic conditions are.
